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And now a return to a favorite topic here at AVC -
patents, patent trolls, and the urgent need for patent reform
here in the US.

One of my favorite ideas for sensible patent reform is "loser
pays" for the legal costs of the other side.

The reality is that patent trolling is a low cost form of
shakedown and that there isn't much economic cost on the troll to
deter this behavior. If challenged in court, patent trolls win
less than 25% of the time. And yet so few of these shakedowns
ever go to court because the cases get settled for economic
reasons (settlement cost are less than expected defense costs).
And these settlements fund the trolls to keep shaking companies
down. If the target company can recover their legal costs by
defending themselves and winning, then the math over the
settlement changes and more cases will be litigated, thus
increasing the costs for the trolls.

This is where the SHIELD act comes in. There are so many things
to like about this bill. It is only five pages long. It only does 1 1/2 things. The
one thing is amend patent law to provide for loser pays. The 1/2
thing is it allows the court to require the troll to post a bond
early on in the case to be sure they can and will pay the legal
costs if they lose.

This is a bi-partisan piece of legislation being introduced by a
representative from Oregon (Peter DeFazio - D) and a
representative from Utah (Jason Chaffetz - R). In their press
conference introducing the bill (embedded below), they say that
the leadership is going to get moving on this bill quickly.